Detroit With a Boardwalk

George Anastasia is an author and former reporter for the Philadelphia Inquirer. He covered Atlantic City during the start of the casino era.

Thirty years ago, disgraced Atlantic City Mayor Michael Matthews stood in front of a federal judge and pleaded guilty to accepting a bribe from an FBI agent posing as a mobster.

It was 1984. Atlantic City was a boomtown then, just six years into the casino gambling era that was going to remake the shabby resort town that I was assigned to cover as a reporter for the Philadelphia Inquirer.

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Every day, I watched as buses from up and down the East Coast dumped thousands of slot machine mavens and roulette table hopefuls at the eight gambling palaces that had sprung up since 1978. Construction was everywhere. So was land speculation. The real estate market was a real-life game of Monopoly. Everyone, it seemed, was flying past Go and collecting their $200.

That included an abashed Matthews, who told the court, “Greed got the better of me.”

Matthews, the first directly elected mayor of Atlantic City, spent about five years in prison. He returned to the Atlantic City area, but was never again a political player. He died in January at the age of 79.

Today, the city itself is in critical condition and the words of the former mayor could serve as its obituary. Greed has done Atlantic City in.

Trump Plaza Hotel & Casino in Atlantic City. | AP Photo

Four of its 12 casinos have closed in the last year, including the Revel, the newest and glitziest, despite a $260 million, taxpayer-funded gift courtesy of Gov. Chris Christie. A fifth, the Trump Taj Mahal, is on the brink. The gaming industry—proponents never call it gambling—has lost nearly 8,000 jobs since the beginning of the year and its revenue, which hit a high of $5.2 billion in 2006, is down nearly 50 percent. Add to that the city’s $65 million budget shortfall, pending layoffs of as many as 300 city workers and a tax base in free fall.

Sure, the still-sluggish U.S. economy is a factor. The loss of the East Coast gambling monopoly that Atlantic City enjoyed for nearly 20 years is another. Poor planning, lack of foresight and the failure to expand the city’s attractions beyond casinos are part of the mix. Even acts of God played a role: Though the city wasn’t devastated in 2012 by Hurricane Sandy the way other Jersey Shore towns were, tourism plunged in the immediate aftermath at a time when the city could least afford it.

But there is something else at play, something in the city’s DNA that is painfully obvious to anyone who’s lived or worked there.

Even during its halcyon days, Atlantic City was an enterprise built around blue smoke and mirrors. Think, Nucky Johnson, the inspiration for HBO’s Boardwalk Empire, and the wide-open rackets of gambling, booze and prostitution during Prohibition.

It was all about grabbing whatever you could, whenever you could from whomever you could. The city worked on a 12-week economy, Memorial Day to Labor Day. Get the tourists and vacationers into town. Sell them the beach and the Boardwalk and then send them home broke. The Miss America Pageant, held in Atlantic City for most of its years, was part of that con. It was the 1920s brainchild of a city huckster looking for a way to extend the summer season for another week. The city was born as a come-on, a fugazy.

Wonder why Atlantic City is failing? The better question, the one asked by people who know the town: Why did anyone think it would ever succeed?

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If New York is the Big Apple and New Orleans is the Big Easy, then Atlantic City is, and always has been, the Big Hustle. The coming of casino gambling didn’t alter any of that. It just made the pot bigger.

The city was willed into existence in the 1850s by real estate speculators and other investors who turned a marshland then known as Absecon Island into a summer resort. It worked out great for a while. Until the mid-20th century, Atlantic City was the “Queen of Resorts” with elegant Victorian hotels that attracted some 16 million visitors in 1939. Sale of booze (before, during and after Prohibition) and illegal gambling provided entertainment for adults and a lucrative sideline for many hotels.

The lights started to dim after World War II with the advent of interstate highways, less expensive airfares and, later, competition from family attractions like Disneyland. By the 1960s, “Atlantic City had lost its cachet as a tourist destination,” declared a 2009 report by the Philadelphia Federal Reserve Board. (Yes, the Philadelphia Fed actually studied the problem.)

Then things got really ugly: Between 1965 and 1975, the Fed reports, jobs in the city shrank by 17 percent; 40 percent of hotel rooms were shuttered by 1976; unemployment was 18.1 percent in 1977; and tourist revenue plummeted from a high of $70 million in 1956 to $40 million in 1974.

Lawmakers had been pushing for years to introduce casinos statewide—a proposition that didn’t sit well with New Jersey residents. But now they redoubled their efforts. They convinced voters to allow gambling only in Atlantic City and sold the measure as a “unique tool for urban redevelopment.” Blackjack and slots, they promised, would be a catalyst for the revival of a city that at that time looked like Camden or Detroit with a Boardwalk.

As part of the deal, casinos paid a sliver of their revenues to the state for senior citizen benefits throughout New Jersey (this was the “what’s-in-it-for-us” bone thrown to voters outside of Atlantic City) and were supposed to dedicate 2 percent of annual revenues to boost the “health and well-being” of Atlantic City. The latter didn’t happen, thanks to a loophole. Bottom line: six years of casinos, with little or no money for Atlantic City’s revival.